What should I do if I lose my job and can't pay my mortgage?

Contact your bank as soon as you know, ideally before you miss a repayment. The earlier they know, the more options they're likely to have for you.

What is a hardship arrangement?

It's a temporary change to your loan when you can't meet repayments for a reason like job loss or injury. It might reduce or pause your repayments for a set period.

Does interest still build up during a hardship arrangement?

Yes. Interest keeps accruing in the background, so your balance can grow and repayments may be higher once the arrangement ends.

Will a hardship arrangement affect my credit report?

It can show on your credit report for a period. That doesn't stop you refinancing later, but some lenders want you to be out of hardship for a while first.

Can I ask for hardship before I've missed a repayment?

Yes, and that's the best time. If you can see trouble coming, telling your bank early gives you both time to work out a plan.

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Straight Answers · Refinancing

What if I lose my job and can't make my mortgage repayments?

Bayley Clarke · Mortgage broker on the road · Last checked 11 November 2026 · 3 min read

The short answer

The best thing you can do, as soon as you know you might not be able to meet the repayments, is let your bank know straight away. The sooner they know, and the more information they have up front, the more supportive they're likely to be.

Banks have hardship arrangements for exactly this: when life happens and the income disappears. That might mean reduced repayments for a set period, or a pause. Either way the interest keeps stacking up in the background, so it buys you time rather than making the problem go away.

The 90 second version, filmed from the driver's seat. The rest of this page is the detail underneath it.

First, work out your runway

Unfortunately this does pop up. People lose their job, get injured, whatever it may be, and all of a sudden the income they had is gone. So what do the options look like? It comes down to how your savings look, what your repayments are, and how long you've got before the savings run down.

If you've got money in your offset or redraw, that's your buffer. Work out how many months of repayments it covers. That number tells you how urgent things are, and it's the first thing your bank will want to know too.

Why telling the bank early matters

If you call your bank before you miss a repayment, they've got time to work through it with you. If you call after three missed repayments, the conversation starts from a much worse place, for you and for them.

You have the right to ask your lender for a hardship arrangement if you can't meet your repayments for a reason like losing your job or getting injured. Have the basics ready when you call: what happened, what your income looks like now, how long you think it'll last, and what you can afford to pay in the meantime.

What a hardship arrangement can look like

It can mean reducing your repayments for a set period, or pausing them for a set period. Some banks may also look at extending the loan term or switching to interest only for a while to bring the repayment down.

Whatever the arrangement, the interest doesn't stop. It keeps building on the balance, so when the arrangement ends, you may owe more than before or face higher repayments to catch up. A hardship arrangement can also show on your credit report for a period, which is worth knowing if you're planning to refinance later.

The honest bit: banks generally want you to keep the house

These arrangements are there for things nobody expected. A bank would generally rather work with you through a rough patch than see you lose your home, if it can be helped.

So keep your bank well informed and across your situation, and you give yourself the best chance of keeping the house and getting back on track. If you're not sure what to ask for, or you'd like someone in your corner when you call, get in touch.

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Next question

I had a hardship arrangement a couple of years ago. Will that stop me refinancing?

Generally not. Banks differ on how long you need to be out of hardship, from three months to a couple of years.